Tariff-Induced Stagflation Fears Hit Wall Street

Wall Street strategists are sounding the alarm that the US economy is drifting toward stagflation as the impact of trade tariffs begins to surface, potentially restricting the willingness of the Federal Reserve to slash interest rates. While investors have largely shrugged off warning signs until now, data suggest an approaching period of sticky inflation and sluggish economic growth.

The arrival of stagflation in earnest would put Donald Trump’s administration in the company of that of President Jimmy Carter and the economic afflictions of the late 1970s. The biggest warning sign so far is the historic damage being done to the US dollar—down 8% against a basket of peers.